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Do You Know What Your Annual Medicare Part D Notice Requirements Are?

October might seem far away, but it's never too early for a reminder that all employers sponsoring group health plans with prescription drug coverage, regardless of size, must ensure the Medicare Part D Creditable Coverage Disclosure notice is provided before October 15, 2023.

The purpose of the disclosure notice is to inform Medicare-eligible employees whether the prescription drug coverage offered is considered “creditable” per the Centers for Medicare and Medicaid Services (CMS) guidelines. In general, to be creditable, the prescription drug coverage must be expected to pay, on average, as much as the standard Medicare prescription drug coverage.

The disclosure notice must be given to all Medicare eligible individuals who are covered under, or apply for, your prescription drug plan. This includes active employees, disabled employees, retirees, COBRA qualified beneficiaries, covered spouses, and dependents. Identifying individuals who are eligible for Medicare Part D can be difficult for a group health plan, especially when the individual’s eligibility for Medicare is based on a factor other than age, such as disability or end-stage renal diseases.

Given that plan sponsors may not know all who are Medicare eligible, it is the simplest way to approach providing notices is to disclose them to everyone who is enrolled or seeking to enroll in the plan.

If you are unsure about your prescription drug plan status, you may want to request a determination letter from your carrier. OneDigital may also be able to assist you in verifying the status of your prescription drug plan.

Once you confirm if your prescription drug coverage is creditable or non-creditable, complete the Model Creditable Coverage Notice or the Model Non-Creditable Coverage Notice. If multiple prescription drug plans are offered, ensure you use the correct notice to reflect its creditable coverage status.

As a reminder, this is not the only time of year you must provide a creditable coverage notice. You must also provide notice:

  • Before an individual’s initial opportunity to enroll in Part D (this is generally satisfied by the October 15th annual notice requirement).
  • Before the effective date of coverage for any Medicare-eligible individual who joins your plan.
  • When, if ever, your plan’s prescription drug coverage ends or its creditable coverage status changes.
  • Upon an individual’s request.

If you have questions about prescription drug creditable coverage or its accompanying notice and reporting requirements, contact your OneDigital consultant or OneDigital's Compliance Consulting Team.